Should You Buy or Lease a Car?

Buy or Lease a Car

There is not a clear-cut answer to the question must you buy or lease a car. It primarily depends on the lifestyle of the customer and the way they prefers to pay for the things they buy. Here are a few pros and cons of leasing and buying a car to help you make a wise decision.

Buying Pros:

You become the owner of the car.

You do not have to follow any mileage limit and there is no excess mileage penalty on it.

You do not need to have a contract on buying.

You can change it anytime.

You can use it as the trade-in on your next purchase.

You can sell the car whenever you want.

You can save money in the long run.

You can modify the car as you like it.

Buying Cons:

You have to pay a huge sum of money at once.

The buying requires a huge down payment in the beginning if you do not want to be upside down on loan.

Your money is locked in the purchase of the vehicle which depreciates over time.

You have to bear the wear and tear costs after the warranty expires.

Your monthly car payments are much higher than the lease installments per month.

Leasing Pros:

You can transition between new vehicles easily and quickly.

You can choose a low or no down payment plan.

You do not have to pay a massive sum at once.

You can pay a small amount of money in installments every month.

You would have to pay fewer sales tax.

You would also not need to go the trade-hassles at the end of the trade.

You do not have to bear all of the repairing cost because the leased vehicle comes under the warranty of the factory.

You can drive the car of your choice for less money thanks to the wide range of leasing offers.

Leasing Cons:

You do not become the owner of the car at the end of the lease. However, you can always buy it.

Your mileage is fixed in the lease contract. It is usually 12,000 miles a year.

You might find it expensive to terminate a lease before time.

You might have to pay wear and tear costs at the end of the contract.

You might find it difficult to read the lease contract and understand all of the different terminologies.

How to Decide?

The decision of buying or leasing a car depends on the following five critical points:

Monthly Cash Flows: You can lease a car on a low monthly cash flow. However, you need to pay more per month when buying a car.

Available Savings: You can lease a car with low or no down payment plan. However, there is no such option when buying a car.

Your Driving Requirements: You can drive as much as you want in your newly purchased vehicle but you can only go up to 12,000 miles (or whatever the contract says) in a leased car.

Future Value of the Vehicle: If you lease a car, you will have to return it after a year. Therefore, you do not need to worry about its future value.

Your Customizing Needs: If you own a car, you can customize it as much as you want. It might not be possible with a leased car.